Background of China
China is the third largest country in the world by area after Canada and the Russian Federation. Twelve countries border it. The 1.3 billion citizens of China make up one - quarter of the world's population, making it the most popular country in the world. China is important because of it's economic potential. It has deposits of most minerals including oil and gas and it is the world's biggest coal producer. The Chinese work force is the largest in the world. China has the potential to overshadow the economy of any other country, both as a consumer and as an industrial producer.
It is the largest communist controlled country and it's military might is awesome in terms of both nuclear weapons and a large conventional force. One of the pemanent seats of the UN Security Council is occupied by China and it has influence well beyond it's own borders.
China is a society undergoing great change. In the 1970s, factions within the leadership of the Communist Party of China (CPC) became acutely aware that economic and social pressures might undermine and destroy their control. For this reason they embarked on reforms which involved loosening economic and social controls in the country while retaining their strong political grip.
By the late 1970s, the CPC had largely organised the provision of basic housing, health, food suplies, clothing ect to the population. However, the people were now ready to demand a standard of living beyond the basics. If this was no forthcoming then it was feared that discontent would develop and threaten the leadership role of the CPC. The Chinese economy therefore had to be modernised in such a way that political control was maintained.
The economic policies carried out by DEng Xiapoing have been continued by his successors, Jiang Zemin and Hu Jintao. His economic reforms such as the "Four Modernisations" and the "Great leap outwards" transformed China's industry and agriculture and opened up strong economic links with other countries.
Since 1978 the people's republic of China government has been reforming its economy from a Soviet-style centrally planned economy to a more market-oriented economy. This is being done within a rigid political framework controlled by the Communist Party of China. It is called "Socialism with Chinese characteristics" and is one type of mixed economy.
To this end the authorities have switched to a household responsibility in agriculture in place of the old collectavisation. They have increased the authority of local officials and factory managers in industry. hey have also encouraged the growth of the private sector where they have permitted a wide variety of small-scale enterprises in services and light manufacturing. Furthermore, they have opened the economy to increased foreign trade and foreign investment. The government has emphasised raising personal income and consumption and introducing new management systems to help increase productivity. It has also focused on foreign trade as a major vehicle for economic growth. The result has been a massive raise in GDP since 1978